05 December 2011 3:55 PM

Merkel and Sarkozy meet in Paris: 'And now for our next coup...'

It is 3 pm here on the Continent and President Nicolas Sarkozy of France and the German Chancellor, Angela Merkel, have just come out of their meeting in Paris, the kick-off to the EU summit later this week.

The two – right, call them Merkozy -- have just told the Press they want a wholesale change to the EU treaties to lock-in fiscal discipline and restore investor confidence in the eurozone.

Two points. First, it will take more than a re-jigging of the treaties to make the vastly indebted and uncompetitive countries of the eurozone look like a good place for investment.

Second, I don’t think either Mrs Merkel or Mr Sarkozy means it. I don’t think they believe there is any chance of treaty change soon enough to make any change at all in investor attitudes towards this aging and ever-shrinking part of the global economy called the EU.

The tell is in their throw-away line that followed their united call for treaty change. If they couldn’t get that, they said, they were open to an agreement just among the 17 members of the eurozone.

Too right they are. The only way Merkozy are going to take the control over member states' fiscal policy – in effect, over the budgets of all the member states of the single currency bloc – is by ‘intergovernmental’ means.

Actually trying to get a wholesale treaty change through would trigger at least one referendum. And given how people – French, Dutch, Irish, all of them members of the euro – vote when given a chance to do so, I’d say the chances of treaty change of this magnitude getting through are slim to zero.

So there will be no big-time treaty change because there must be no referendum. Which doesn’t mean there won’t be big-time change. Up until today, the phrase the eurocrats and Brussels elite have been using – and using it so much in harmony that they were clearly sent the memo reminding them to use the phrase – was ‘limited treaty change.’

That ‘limited’ is a weasel word. As I’ve pointed out before, everything is limited except cosmic expansion and mother love, so saying treaty change would be ‘limited’ is meaningless.

But it’s subtext was: too minor to merit a referendum, so we will change the treaties by the self-amending mechanism laid out in the Lisbon Treaty, and no you don’t know about that mechanism because it wasn’t much advertised. That subtext was blown apart today.

Merkozy have said they want a wholesale change. No Brussels propaganda can now squeeze ‘wholesale’ into ‘limited.’

So, what Merkozy are admitting is that they want big-time change: a surrender by the 17 eurozone member states of their power over their own national budgets. The power will be put instead under German and French direction.

But Merkozy knows they won’t get this phenomenal change in power by orthodox treaty change, because any people given a referendum will reject it. So, Merkozy will get it by ‘intergovernmental’ means.

The plans of Chancellor Merkel and President Sarkozy have been well-advertised, since long before today.

The chancellor has called for a full fiscal union and automatic punishments for any state which exceeds fiscal limits defined by the Germans.

Mr Sarkozy has called for further erosion of the power of any small EU state to stop any of this: for example, at a speech in Toulon last week he said there must be more council decisions by qualified majority voting.

This policy is meant to destroy the veto power of small states. (And once this new fiscal-union cartel gets to work in the European Council, it will destroy Britain’s veto power, too, but that is for another blog.)

Merkozy want all these new powers over the budgets of member states to be established by the ‘intergovernmental’ method. That means the muscle of the governments of Germany and France will direct all future decisions on fiscal policy in member states. The established EU institutions such as the European Commission won’t.

Though it is not worth complaining much about that particular manoeuvre. Having the European Commission control all national budgets would be no better than having the Germans and French control all national budgets.

You can forget the EU propaganda that the commission protects the small countries of the EU. What the commission protects is its own powers, and what the commission wants is an extension of its budgets, its ‘own resources.’ That is, it wants the power to claim revenue by taxing you directly

But the ‘intergovernmental’ plan shows how Mrs Merkel and Mr Sarkozy intend that these new powers must not be exercised by the commission but by the German and French governments.

More, by the intergovernmental method, these new powers and the Germans and French in charge of them will not be controlled by the treaties.

Which is the point I am coming to in all this.

We know that Mrs Merkel and Mr Sarkozy plan to take away the power of all eurozone nations to control their own budgets. But the assumption so far in eurozone countries has been that this plan could only be put into force following agreement to treaty change.

Certainly this Merkel-Sarkozy plan amounts to a whole new constitutional settlement for eurozone member states: taxation without representation, the end of the power of the democratically-elected representatives of the nation to decide what tax to levy, and what spending to do.

These powers are at the foundation of any parliament. All other parliamentary powers are no more than parsley sprinkled across the meat and potatoes of tax and spend. Take away tax and spend powers from a parliament and you take away representative democracy.

And, repeat, this Merkozy removal of powers is meant to be permanent. This is far beyond any idea of temporary control to which the eurozone bail-out countries of Greece, Portugal and Ireland now submit.

The reasoning in the eurozone countries has been that, since these plans clearly give vast new powers over to ‘Europe’ that were never agreed in any earlier treaty, a referendum must happen, right? Wrong.

Both Chancellor Merkel and President Sarkozy have made it clear there must be no chance of any referendum that could stop their plans. Nothing that came out of today’s meeting in Paris changes that.

All the clues have been there all along that they intend to put in place all these powers by methods outside the EU institutions. They are determined to prevent a treaty change before these new fiscal powers are activated, thereby preventing any referendum which would stop the creation of a fiscal union.

And where they can’t put them in place by methods outside the EU institutions, they will agree simply to interpret the treaties as though their plans were allowed under the present text.

A recent comment on the Irish Economy website gave one good suggestion on just what means could be used: Protocol 14 of the Lisbon Treaty. Read the protocol and it seems innocuous. It talks about ‘the ministers of the member states whose currency is the euro’ and about how meetings shall take place between them ‘to discuss questions related to the specific responsibilities they share with regard to the single currency.’

But if the ministers decide to take on responsibility to hand over control of their budgets to a new eurozone finance committee created by the Germans? No treaty change needed, because it is already allowed for in the protocol.

The euro-fanatics who framed the treaty put in nothing by accident. The German and French leaders are ready to decide the treaty articles and protocols mean just what they want them to mean.

Remember that Article 125 of the Lisbon Treaty, the so-called no-bail out clause, says the EU shall not be liable for the debts of member state governments. That hasn’t stopped those European empire builders who want to establish a centralised fiscal and monetary power in the EU doing exactly that: landing the burden of one state’s debts onto the governments of another and onto the European Central Bank.

Expect such a clause as Protocol 14 to be used the same way. Some years from now, the Germans and the French may allow a treaty change to tidy it all up, after the peoples of the eurozone countries have been forced into this new regime. But Germany and France will take fiscal power in the meantime.

Mrs Merkel has made it clear she wants the new powers up and running in a matter of months: and treaty change within a matter of months is impossible.

At which you ought to be outraged. But you should hardly be surprised. What we have now is a German and French-led EU cartel which has so far pulled off coups in Greece and Italy. Each of those states is now ruled by unelected governments dropped into office by Berlin, Paris, the European Commission and the European Central Bank

These successful coups have made Germany and France confident of further success. They are on a roll: next target, a coup of the entire system of EU treaty law covering fiscal powers.

And here’s the surprising part – or maybe not so surprising, given his history of Vichy-like behaviour – Merkozy can count on the cooperation of David Cameron in this manoeuvre to stop any chance of any of the peoples of the eurozone countries being given a chance to vote ‘No!’

What we saw today in Paris was an announcement by Merkozy that they intend to go ahead with their drive to destroy democracy across 17 European states. By agreeing to this -- and he will -- Mr Cameron will act as collaborator in establishing Germany and France as the fiscal commanders over these nations of Europe.

Across Europe, one can only feel dread. In Britain, one ought to feel shame as well.

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MARY ELLEN SYNON

Mary Ellen Synon is based in Brussels as a columnist at the Irish Daily Mail and contributor to the Mail on Sunday.

At other times she has worked as: a columnist at the Irish Sunday Independent and the Sunday Business Post, Ireland correspondent and later Europe correspondent at the Economist, an associate producer at CBS News 60 Minutes based in London, and a reporter for the Daily Telegraph.

Early in her career she was awarded a travelling fellowship by the Winston Churchill Memorial Trust to allow her to study the Common Market.